Negligent Hiring: Recidivism and Employment with a Criminal Record (Job Talk Paper)
This paper tackles a difficult legal and policy challenge—reducing the impact of criminal justice records on job applicants’ chances in a manner that does not spur more discrimination—by looking at how another area of law, tort liability, impacts employers’ decision-making. It uses theoretical and empirical methods to study the most common reason employers report being reluctant to hire workers with a criminal record: legal liability generated by the tort of negligent hiring. While the purpose of the tort is ostensibly to protect and make whole those harmed when an employee misbehaves in a foreseeable manner, I show that, in practice, the tort generates additional criminal behavior and worsens employment outcomes.
I first provide a survey of the current doctrine across the states and trace the origins of the tort through the common law. I show that widespread adoption of negligent hiring increased the number of property criminal offenses by over seven percent. Next, I examine state legislation clarifying the negligent hiring standard and reducing the likelihood that an employer will be found liable. I use newly constructed administrative data from over a dozen states to compare employment and recidivism rates in the states that changed their negligent hiring law to otherwise similar states that did not (a difference-in-differences analysis). I show that the laws increase employment by nine percent, wages by twenty-five to thirty-five percent, and lower reincarceration for a new criminal offense by twenty-five percent. Throughout the paper, I also address the impact of related policies by presenting new data and analysis of the effects of legislation restricting the timing of inquiries into criminal histories (Ban-the-Box legislation) and the use of hiring credits (the Work Opportunity Tax Credit).
Any views expressed are those of the authors and not those of the U.S. Census Bureau. The Census Bureau's Disclosure Review Board and Disclosure Avoidance Officers have reviewed this information product for unauthorized disclosure of confidential information and have approved the disclosure avoidance practices applied to this release. This research was performed at a Federal Statistical Research Data Center under FSRDC Project Number 2295. (CBDRB-FY22-P2295-R9926)
Estimating the Impact of the Age of Criminal Majority: Decomposing Multiple Treatments in a Regression Discontinuity Framework (with Michael Mueller-Smith and Caroline Walker)
This paper studies the impact of adult prosecution on recidivism and employment
trajectories for first-time felony youth criminal defendants. We use extensive linked
Criminal Justice Administrative Record System (CJARS) and socio-economic data
from Wayne County, Michigan (Detroit). Using the discrete age of majority rule, and
a regression discontinuity design, we find that adult prosecution reduces future criminal
charges over 5 years by 0.48 felony cases (20%) while also worsening labor market
outcomes: 7.6 fewer employers (19%) and $613 less earnings (21%) per year. We
develop a novel econometric framework that combines standard regression discontinuity
methods with predictive machine learning models to identify mechanism-specific
treatment effects that underpin the overall impact of adult prosecution. We leverage
these estimates to consider four policy counterfactuals: (1) raising the age of majority,
(2) increasing adult dismissals to match the juvenile disposition rates, (3) eliminating
adult incarceration, and (4) expanding juvenile record sealing opportunities to those
prosecuted in the adult system. All four scenarios generate positive returns for government
budgets. After accounting for increases in recidivism generated by many of these
policies and the corresponding victim costs borne by society, we find positive social
returns for expanding the reach of juvenile record sealing and increasingly dismissing
marginal adult charges, while raising the age of majority breaks even. Eliminating
prison for first time adult felony defendants increases net social costs.
Any opinions and conclusions expressed herein are those of the authors and do not reflect the views of the U.S. Census Bureau. The U.S. Census Bureau reviewed this data product for unauthorized disclosure of confidential information and approved the disclosure avoidance practices applied to this release (DMS number: 7512453, DRB approval number: #CBDRB-FY22-291).
Who Benefits from Corporate Tax Cuts? Evidence from Banks and Credit Unions around the TCJA (with Edward Fox)
The TCJA of 2017 made large changes to the taxation of corporate and pass-through businesses in the U.S. Understanding the effects of these changes is complicated by the difficulty of finding control firms whose taxation was not altered by the Act. We study the effect of the TCJA on small and medium size banks using credit unions—which compete with these banks for deposits and in making loans—as a novel control group. Credit unions were not taxed both before and after the Act. Using a difference-in-difference framework, we find that an important fraction of the incidence of the tax cut goes to depositors. We find little evidence that employees or borrowers from banks receive a share of the tax cut in the form of higher wages or lower interest rates on loans or that banks increase their investment in fixed assets as a result of the Act.
Published academic work:
Prescott, J.J., Benjamin Pyle, and Sonja B. Starr. 2020. "Understanding Violent-Crime Recidivism." 95 Notre Dame L. Rev. 1643.
Prescott, J.J. and Benjamin Pyle. 2019. "Identifying the Impact of Labor Market Opportunities on Criminal Behavior." International Review of Law and Economics.
Pyle, Benjamin and John C. Williams. 2016. "Data Dependence Awakens." FRBSF Economic Letter 2016-12 (April 8).
Daly, Mary C., Bart Hobijn, and Benjamin Pyle. 2016. "What's Up with Wage Growth?" FRBSF Economic Letter 2016-07 (March 7).
Rudebusch, Glenn D., Daniel J. Wilson, and Benjamin Pyle. 2015. "Residual Seasonality and Monetary Policy." FRBSF Economic Letter 2015-27 (August 24).
Daly, Mary C., Fernanda Nechio, and Benjamin Pyle. 2015. "Finding Normal: Natural Rates and Policy Prescriptions." FRBSF Economic Letter 2015-22 (July 6).
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